That could delay auctions of spectrum even further, considering the precarious financial situation of the sector, people familiar with the matter said, perhaps until late next year. The sale of airwaves, including 5G spectrum, will be conducted this financial year, the government had said earlier. This timeline may be reconsidered, said people with knowledge of the matter.
DoT<\/a> is recalculating the dues that telcos owe to the government as per the Supreme Court order, which has clarified that all revenue accrued to the licence holder will have to be included while arriving at gross revenue. As per this definition, “the licence fee and spectrum usage charges could rise by 10%,” one of the officials said. This will result in a proportionate rise in the dues of each telco, the official added.
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Spectrum Sale<\/a> unlikely in FY20<\/strong>
The Supreme Court order of October 24 meant that the telcos faced licence fee demands of nearly Rs 92,642 crore, including penalties and interest, as per DoT’s submissions in court in mid-July. Spectrum usage charge<\/a> (SUC) demands totalled nearly Rs 41,000 crore, also including interest and penalties. The Supreme Court has given a three-month deadline for the payments to be made.
Vodafone Idea<\/a> and Bharti Airtel<\/a> are the worst hit, facing demands of more than Rs 39,000 crore and Rs 41,000 crore, respectively, in licence fees and SUC. A10% increase could potentially see this rising to Rs 42,900 crore and Rs 45,100 crore, respectively. Reliance Communications, undergoing bankruptcy resolution, faces a demand of Rs 20,000 crore. Tata Teleservices, which has sold its consumer mobility business to Bharti Airtel, owes Rs 13,000 crore to the government. Reliance Jio Infocomm, which launched services in September 2016, owes around Rs 41 crore.
The dues are being updated to reflect tweaks to the definition after the order and to update the figures till date, said officials. The data will also be submitted to the committee of secretaries set up to suggest measures to restore the health of the sector saddled with debt of over Rs 7 lakh crore, amid pressure on revenue and profitability.“The updated demands should go out this month,” one of the officials said. “There may be multiple demand notices which will be sent to each company. Separate notices may be sent for different fiscal years. It’s a complex exercise.”
Vodafone Idea and Bharti Airtel have sought urgent relief from the government, saying that they will face an “unprecedented crisis” if forced to pay the full amount. Rival Jio has opposed any relief on the AGR issue.
Impact on auction<\/strong>
A spectrum auction that requires a high level of investment seems unlikely this fiscal year, said the people cited above.
“No decision has been taken yet but we are in November, the operators have three months to pay their AGR dues<\/a> and spectrum auctions are scheduled for this financial year,” one of them said. “The auctions may get delayed by another two-three quarters at least.”
India’s largest auction involving the sale of 8,293.95 MHz of airwaves, including 4G and 5G, were expected to fetch at least Rs 5.86 lakh crore for the government at the base price. People aware of the development said that the timeline for spectrum auctions is being reconsidered, keeping the state of the industry<\/a> in mind.
The sector regulator has suggested a base price for 5G airwaves at Rs 492 per MHz and has proposed a minimum sale of 20 MHz blocks. That would mean a telco spending close to Rs 10,000 crore for 20 MHz, and Rs 50,000 crore for 100 MHz, rates that telcos have said were exorbitant.
Curious about future of IoT in India? Let the experts be your guide, Click Here<\/a>
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